The end of the furlough scheme-is redundancy inevitable?

With the end of the furlough scheme on the 30th September 2021, it’s encouraging to see that the number of planned redundancies isn’t as high as many had feared.  Insolvency Service figures show that 143 employers have submitted 201 HR1 forms (the statutory notification documentation that must be submitted in advance by an employer if they plan to make 20 or more employees redundant) totalling 12,687 redundancies. Particularly when compared to previous months, it doesn’t look as bad as had been expected.

But while it would be nice to be able to assume that all of the gloomy predictions about job losses aren’t going materialise, it’s a bit too soon to be confident we’re out of the woods just yet. The notifications only apply to redundancies of 20 or more people and there might be a lot of companies who are having to contemplate letting smaller numbers of people go after the Coronavirus Job Retention Scheme closes. And there are other factors that’ll start having an impact including the rising costs of employment due to the recently announced increase in National Insurance contributions.

Businesses are going to continue to face turbulent times and must be aware of what their responsibilities are in case they find themselves in the position of having to consider making redundancies. You might already be putting the wheels in motion to reduce headcount. Or, even if you’re planning to bring everyone back from furlough in the short term, it could remain a strong possibility that there will need to be job cuts in the near future.

Complying with the requirements of the redundancy process

Unfortunately, the end of the furlough scheme will result in redundancies. The redundancy process has several steps to it. Careful forward planning is needed to make sure you’re complying with every aspect of the law within the required timescales.

The starting point should always be assessing whether there is any way compulsory redundancies can be avoided. If there’s a clear business case that indicates they will be necessary, you’ll need to establish what the likely number of reductions is and where they will potentially come from. It’s essential to clearly identify the redundancy selection pool, and make sure that you comply with the required notice periods too as determined by the numbers involved (employers must notify at least 30 days before the first dismissal if 20 to 99 redundancies are proposed, and at least 45 days if 100 or more redundancies are proposed). Ensure that any specific agreements or contractual obligations that relate to redundancy are factored in. You’ll then move into the consultation period, followed by the selection process itself.

All of this must be supported by clear communication to those directly affected and also more generally to your company as a whole. As we explain in one of our other articles about managing redundancy, the process can be a minefield – so you need to approach it with great care to make sure you aren’t putting your business at risk of being taken to tribunal.

The end of the furlough scheme – Be as supportive and sensitive as possible

There is a risk that you become so absorbed with getting the process right and complying with all of the legalities that the need to handle the emotional side ends up being a little overlooked. If the people in the redundancy pool have been furloughed, they could be feeling particularly isolated on top of dealing with all of the upset that typically accompanies the prospect of redundancy. Offer as much support as you can: keep the channels of communication as open as possible and explore any other forms of support you are in a position to provide like outplacement and CV writing assistance for example.

What about employees who are returning to work after furlough?

Even if employees are not at risk of redundancy at the end of furlough, you still must think about the steps needed before you bring them back at the end of the furlough scheme. If their hours and conditions are going to change in any way, make sure the new terms are properly consulted on and agreed and set out in an updated contract. It’s wise to provide confirmation in writing of furloughed employees’ return to work details along with any other relevant information they need to have beforehand. Think about whether any return-to-work training will be required and consider whether any appropriate support mechanisms need to be put in place to help the transition.

If colleagues of returning employees are being made redundant, handle this particularly sensitively; it’s likely to be upsetting to others who are remaining in the company but might be felt particularly acutely by employees who are returning from furlough and might feel guilty that they have retained their job when others haven’t.

The end of September is going to be a major transition period for many employees. Could you benefit from having expert support in managing the return to work, or guidance in dealing with a redundancy situation that is arising as a result of the end of furlough? If so, then please don’t hesitate to get in contact to have a chat about how we can help you.

 

 

 

 

 

 

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